Session 1 presentation from the 3rd Strategic Dialogue of the Carbon Market, 21-22 September 2018

1. UNFCCC Secretariat
Article 6 of the Paris Agreement
Status update
Carbon Market Platform
21-22, September 2018, Halifax

2. NDCs in the Paris Agreement
The Paris Agreement and its objectives
Collective goals: long term
temperature goal;
resilience and low GHG emission
development
Collective efforts: a global emission trajectory
(peaking, reduction, balance between sources
and sinks)
Individual efforts: successive Nationally Determined
Contributions - NDCs
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3. Article 6 – co-operation towards NDCs
Cooperative Approaches
Articles 6.2 and 6.3 and decision 1/CP.21 paragraph 36
The Mechanism
Articles 6.4 to 6.7 and decision 1/CP.21 paragraphs 37 and 38
Framework for non-market approaches
Articles 6.8 and 6.9 and decision 1/CP.21 paragraphs 39 and 40
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4. • Aim of the Paris Agreement
• Hold increase in global temperature to well below 2 °C and
aim to limit to 1.5 °C
• Article 6 is a voluntary set of tools to support
implementation to allow for higher ambition in NDCs
• Ambition in NDCs
• NDCs should reflect highest possible ambition (based on
circumstances)
• Markets and non-markets can/should support that
ambition
• Progression of NDCs over time
• New NDCs should show progression
• Markets and non-markets can/should encourage
progression
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Markets and non-markets in the Paris Agreement

5. • Implementing negotiations started in May 2016.
• First meeting of the Paris Agreement Parties in November
2016 agreed to forward the Paris Agreement Work
Programme for adoption in December 2018.
• Parties continued work in May 2017, November 2017, May
2018 and September 2018.
• Prior to May 2018 session, informal document containing draft
elements of text were published and worked on by Parties at
that session.
• At September 2018 Bangkok session, Parties worked on the
May documents and, through two iterations, produced draft
text for each item. Some corrections agreed on last day.
• The SBSTA Chair to issue “textual proposals” before COP 24
• Need to complete by COP 24, Katowice, Poland in December
2018, with further follow up work in 2019.
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Article 6 implementation negotiations

6. Key issues in cooperative approaches
Extent of the obligations
• Just transfer and acquisition of ITMOs or also creation,
issuance, use, retirement, carryover/ banking etc.?
Nature of oversight
• Who decides if a Party can participate? Who decides if
that participation was consistent with the guidance? An
oversight body, a review team (under transparency or a
specialized one for Article 6) or the Article 15 committee
for compliance?
Recording and reporting
• Does the guidance need to be prescriptive about how and
what is recorded, reported, and correspondingly adjusted?
Relationship with the Article 6.4 mechanism
• Share of proceeds (does this apply, and if so why?),
overall mitigation in global emissions (does this apply, and
if so why?), accounting for 6.4 emission reductions (do
they fall within cooperative approaches guidance).
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7. Key issues in Article 6.4 mechanism
What can be credited?
• Emission reductions, removals, avoidance, mitigation co-
benefits of adaptation?
• Projects, programmes, but sectors, policies?
Supervisory Body
• Membership, composition, role.
Relationship with the NDC
• What does additionality mean in this context, how do
baselines need to operate, and what is relevance of
national NDC/other policies?
Implementing share of proceeds and overall mitigation in
global emissions
• What is the rate of SOP and how is OMGE to be
implemented?
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8. Key issues in the framework for non-market approaches
Clarity of purpose
• Potentially one of the most important instruments in the
“cooperation tool box”.
• Parties see the framework having potential to respond to
a wide variety of well identified needs
• Need to manage the challenge between being unwieldy
(something for everyone) and manageable (what will the
agreed structure be able to realistically deliver)
Nature of oversight
• Does it need a task force, an in-session forum or is it too
early to tell?
Activities, modalities and steps and phases
• Still a menu of possibilities that needs to be trimmed and
refined to tangible work programme activities and
implemented from 2019 onwards.
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9. UNFCCC Secretariat
Contact details:
Paris-Agreement-Article-6@unfccc.int